Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Creatine Monohydrate From the People's Republic of China

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-852]

Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination: Creatine Monohydrate From the

People's Republic of China

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: July 30, 1999.

FOR FURTHER INFORMATION CONTACT: Blanche Ziv, Rosa Jeong, Annika O'Hara

or Marian Wells, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-

4207, (202) 482-3853, (202) 482-3798, and (202) 482-6309, respectively.

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (``the Act''), are references to the provisions

effective January 1, 1995, the effective date of the amendments made to

the Act by the Uruguay Round Agreements Act (``URAA''). In addition,

unless otherwise indicated, all citations to the Department of Commerce

(``Department'') regulations are to the regulations at 19 CFR Part 351

(April 1, 1998).

Preliminary Determination

We preliminarily determine that creatine monohydrate (``creatine'')

from the People's Republic of China (``PRC'') is being, or is likely to

be, sold in the United States at less than fair value (``LTFV''), as

provided in section 733 of the Act. The estimated margins of sales at

LTFV are shown in the ``Suspension of Liquidation'' section of this

notice.

Case History

Since the initiation of this investigation on March 10, 1999 (64 FR

11835), the following events have occurred:

On March 29, 1999, the United States International Trade Commission

(``ITC'') notified the Department of its affirmative preliminary injury

determination in this case.

On March 30, 1999, the Department requested comments on the scope

of this investigation from the petitioner, the respondents, the PRC's

Embassy in Washington, D.C., and the PRC Ministry of Foreign Trade and

Economic Cooperation (``MOFTEC''). On April 2, April 5, and April 19,

1999, we received comments on the scope from the petitioner and the

respondents. Based on the parties' comments, the Department has revised

the description of the scope of this investigation. Specifically, the

Department removed from the scope language the Chemical Abstracts

Service (``CAS'') registry number for anhydrous creatine, which is

chemically distinguishable from creatine monohydrate, the product

produced and sold by the petitioner. As described in the June 25, 1999

memorandum from the Team to Deputy Assistant Secretary Richard W.

Moreland (``Comments on Scope'') which is on file in Import

Administration's Central Records Unit, Room B-099, U.S. Department of

Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.

20230, this change clarifies that the relief requested by petitioner is

only with

[[Page 41376]]

respect to creatine monohydrate. The revised scope appears in the

``Scope of Investigation'' section, below.

On April 7, 1999, the Department issued an antidumping

questionnaire to MOFTEC with instructions to forward the questionnaire

to all producers/exporters of the subject merchandise and that these

companies must respond by the due dates.

On April 28, 1999, the Department asked the China Chamber of

Commerce of Medicines & Health Products Importers & Exporters (``the

Chamber'') to identify any producers/exporters of the subject

merchandise in addition to the producers/exporters who had contacted

the Department and the producers/exporters identified by the

petitioner. We received a response from the Chamber on May 11, 1999.

On April 29, 1999, the Department invited interested parties to

provide publicly available information for valuing the factors of

production and for surrogate country selection. We received responses

on June 7 and June 16, 1999, and additional comments on June 14 and

June 22, 1999.

On May 10, and June 1, 1999, the Department received questionnaire

responses from (1) Tianjin Tiancheng Pharmaceutical Co., Ltd.

(``Tiancheng''); (2) Suzhou Sanjian Fine Chemical Co., Ltd.

(``Sanjian''); (3) Blue Science International Trading (Shanghai) Co.,

Ltd. and Technical Sourcing International (``Blue Science''); (4)

Nantong Medicines and Health Products Import and Export Co., Ltd. d/b/a

Nantong Foreign Trade Corporation Medicine and Health Products

Department (``Nantong''); (5) Shanghai Freemen International Trading

Co., Ltd. and Shanghai Greenmen International Trading Co., Ltd.

(``Freemen''); and (6) Jiangsu Shuang Qiang Chemical Co. and Wuxian

Agricultural Chemical Factory (``SQ''). Tiancheng and Sanjian both

produce and export the subject merchandise to the United States,

whereas Blue Science, Nantong, and Freemen are exporters and SQ is

solely a producer. We issued supplemental questionnaires on June 15,

June 16, June 21, and June 22, 1999, to which we received responses on

June 22, June 28, and July 6, 1999.

On May 20, 1999, Shanghai Desano International Trading Co., Ltd.

(``Desano'') requested that it be considered a respondent in this

investigation. On May 26, 1999, we sent an antidumping questionnaire to

Desano to which we received a response on June 30, 1999. Desano is

solely an exporter of the subject merchandise.

On April 8, 1999, and May 12, 1999, pursuant to the allegation of

critical circumstances contained in the petition, the Department

requested information regarding shipments of creatine from all

respondents participating in this investigation. We received the

requested information on May 13 and May 14, 1999. The critical

circumstances analysis for the preliminary determination is discussed

below under ``Critical Circumstances.''

Postponement of Final Determination and Extension of Provisional

Measures

Pursuant to section 735(a)(2) of the Act, on July 19 and July 21,

1999, several respondents requested that, in the event of an

affirmative preliminary determination in this investigation, the

Department postpone its final determination after the date of the

publication of an affirmative preliminary determination in the Federal

Register. In accordance with 19 CFR 351.210(b), because (1) our

preliminary determination is affirmative, (2) the requesting exporters

account for a significant proportion of exports of the subject

merchandise, and (3) no compelling reasons for denial exist, we are

granting the respondents' request and are postponing the final

determination until no later than 135 days after the publication of

this notice in the Federal Register. Suspension of liquidation will be

extended accordingly.

Scope of Investigation

For purposes of this investigation, the product covered is creatine

monohydrate, which is commonly referred to as ``creatine.'' The

chemical name for creatine monohydrate is N-(aminoiminomethyl)-N-

methylgycine monohydrate. The Chemical Abstracts Service registry

number for this product is 6020-87-7. Creatine monohydrate in its pure

form is a white, tasteless, odorless powder, that is a naturally

occurring metabolite found in muscle tissue. Creatine monohydrate is

provided for in subheading 2925.20.90 of the Harmonized Tariff Schedule

of the United States (``HTSUS''). Although the HTSUS subheading and CAS

registry number are provided for convenience and customs purposes, the

written description of the merchandise under investigation is

dispositive.

Period of Investigation

The period of this investigation (``POI'') comprises each

exporter's two most recent fiscal quarters prior to the filing of the

petition, i.e., July 1 through December 31, 1998.

Nonmarket Economy Country and Market Oriented Industry Status

The Department has treated the PRC as a nonmarket economy (``NME'')

country in all past antidumping investigations (see, e.g., Final

Determination of Sales at Less Than Fair Value: Certain Preserved

Mushrooms from the People's Republic of China, 63 FR 72255 (December

31, 1998) (``Mushrooms'')). A designation as an NME remains in effect

until it is revoked by the Department (see section 771(18)(C) of the

Act).

The respondents in this investigation have not requested a

revocation of the PRC's NME status. We have, therefore, preliminarily

determined to continue to treat the PRC as an NME.

Separate Rates

All the respondents, except SQ (which is not an exporter), have

requested a separate company-specific rate. Blue Science has stated

that it is a trading company which is wholly-owned by persons in Hong

Kong. Therefore, in accordance with our past practice, we preliminarily

determine that this exporter qualifies for a separate rate and that no

separate rates analysis is required for Blue Science (see, e.g., Final

Determination of Sales at Less Than Fair Value: Bicycles from the

People's Republic of China, 61 FR 19026 (April 30, 1996) (``Bicycles

from the PRC'')). The other respondents which have requested a separate

rate have stated that they are privately owned companies with no

element of government ownership or control.

The Department's separate rate test is not concerned, in general,

with macroeconomic/border-type controls, e.g., export licenses, quotas,

and minimum export prices, particularly if these controls are imposed

to prevent dumping. The test focuses, rather, on controls over the

investment, pricing, and output decision-making process at the

individual firm level. See Certain Cut-to-Length Carbon Steel Plate

from Ukraine: Final Determination of Sales at Less than Fair Value, 62

FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts

Thereof, Finished and Unfinished, from the People's Republic of China:

Final Results of Antidumping Duty Administrative Review, 62 FR 61276,

61279 (November 17, 1997); and Honey from the People's Republic of

China: Preliminary Determination of Sales at Less than Fair Value, 60

FR 14725, 14726 (March 20, 1995) (``Honey'').

To establish whether a firm is sufficiently independent from

government control to be entitled to a

[[Page 41377]]

separate rate, the Department analyzes each exporting entity under a

test arising out of the Final Determination of Sales at Less Than Fair

Value: Sparklers from the People's Republic of China, 56 FR 20588 (May

6, 1991) and Mushrooms. Under the separate rates criteria, the

Department assigns separate rates in NME cases only if the respondents

can demonstrate the absence of both de jure and de facto governmental

control over export activities.

1. Absence of De Jure Control

The respondents have placed on the record a number of documents to

demonstrate absence of de jure government control, including the

``Foreign Trade Law of the People's Republic of China'' (``Foreign

Trade Law'') and the ``Company Law of the People's Republic of China''

(``Company Law'').

In prior cases, the Department has analyzed the Foreign Trade Law

and found that it establishes an absence of de jure control. (See,

e.g., Final Determination of Sales at Less Than Fair Value: Certain

Partial-Extension Steel Drawer Slides with Rollers from the People's

Republic of China, 60 FR 54472 (October 24, 1995); see also Mushrooms.)

We have no new information in this proceeding which would cause us to

reconsider this determination. For the purposes of this investigation

and in prior cases, the Department has also analyzed the Company Law

and found that this law establishes mechanisms for private control of

companies which indicate an absence of de jure control. See Notice of

Preliminary Results of New Shipper Review: Freshwater Crawfish Tail

Meat from the People's Republic of China, 64 FR 8543, 8544 (February

22, 1999).

According to the respondents, creatine exports are not affected by

quota allocations or export license requirements. The producers/

exporters claim to have the autonomy to set the price at whatever level

they wish through independent price negotiations with their foreign

customers without government interference.

Accordingly, we preliminarily determine that, within the creatine

industry, there is an absence of de jure government control over export

pricing and marketing decisions of firms.

2. Absence of De Facto Control

As stated in previous cases, there is some evidence that certain

enactments of the PRC central government have not been implemented

uniformly among different sectors and/or jurisdictions in the PRC. (See

Mushrooms.) Therefore, the Department has determined that an analysis

of de facto control is critical in determining whether respondents are,

in fact, subject to a degree of governmental control which would

preclude the Department from assigning separate rates.

The Department typically considers four factors in evaluating

whether each respondent is subject to de facto governmental control of

its export functions: (1) whether the export prices are set by, or

subject to, the approval of a governmental authority; (2) whether the

respondent has authority to negotiate and sign contracts and other

agreements; (3) whether the respondent has autonomy from the government

in making decisions regarding the selection of its management; and (4)

whether the respondent retains the proceeds of its export sales and

makes independent decisions regarding disposition of profits or

financing of losses (see Mushrooms).

Tiancheng, Sanjian, Nantong, Freemen, and Desano have each asserted

the following: (1) they establish their own export prices; (2) they

negotiate contracts without guidance from any governmental entities or

organizations; (3) they make their own personnel decisions; and (4)

they retain the proceeds of their export sales and use profits

according to their business needs without any restrictions.

Additionally, these five respondents have stated that they do not

coordinate or consult with other exporters regarding their pricing.

This information supports a preliminary finding that there is an

absence of de facto governmental control of the export functions of

these companies. Consequently, we preliminarily determine that all

responding exporters have met the criteria for the application of

separate rates.

Use of Facts Available

PRC-Wide Rate

Information on the record of this investigation indicates that

there may be producers/exporters of the subject merchandise in the PRC

in addition to the companies participating in this investigation. Also,

U.S. import statistics indicate that the total quantity of U.S. imports

of creatine from the PRC is greater than the total quantity of creatine

exported to the U.S. as reported by all PRC creatine exporters that

submitted responses in this investigation. Given this discrepancy, it

appears that not all PRC exporters of creatine responded to our

questionnaire. Accordingly, we are applying a single antidumping

deposit rate--the PRC-wide rate--to all exporters in the PRC, other

than those specifically identified below under ``Suspension of

Liquidation,'' based on our presumption that the export activities of

the companies that failed to respond to the Department's questionnaire

are controlled by the PRC government (see, e.g., Bicycles from the

PRC).

As explained below, this PRC-wide antidumping rate is based on

adverse facts available. Section 776(a)(2) of the Act provides that

``if an interested party or any other person--(A) withholds information

that has been requested by the administering authority or the

Commission under this title, (B) fails to provide such information by

the deadlines for submission of the information or in the form and

manner requested, subject to subsections (c)(1) and (e) of section 782,

(C) significantly impedes a proceeding under this title, or (D)

provides such information but the information cannot be verified as

provided in section 782(i), the administering authority and the

Commission shall, subject to section 782(d), use the facts otherwise

available in reaching the applicable determination under this title.''

Section 776(b) of the Act provides that adverse inferences may be

used when a party has failed to cooperate by not acting to the best of

its ability to comply with a request for information. The exporters

that decided not to respond in any form to the Department's

questionnaire failed to act to the best of their ability in this

investigation. Further, absent a response, we must presume government

control of these and all other PRC companies for which we cannot make a

separate rates determination. Thus, the Department has determined that,

in selecting from among the facts otherwise available, an adverse

inference is warranted.

As adverse facts available, we are assigning the highest margin in

the petition, 153.7 percent, which is higher than any of the calculated

margins.

Section 776(c) of the Act provides that where the Department

selects from among the facts otherwise available and relies on

``secondary information,'' such as the petition, the Department shall,

to the extent practicable, corroborate that information from

independent sources reasonably at the Department's disposal. The

Statement of Administrative Action accompanying the URAA, H.R. Doc. No.

103-316 (1994) (SAA), states that ``corroborate'' means to determine

that the information used has probative value. See SAA at 870.

The petitioner's methodology for calculating export price (``EP'')

and normal value (``NV'') is discussed in the

[[Page 41378]]

Notice of Initiation. To corroborate the petitioner's EP calculations,

we compared the prices in the petition for the product to the prices

submitted by respondents for the same product in similar volumes. To

corroborate the petitioner's NV calculations, we compared the

petitioner's factor consumption and surrogate value data for the

product to the data reported by the respondents for the most

significant factors--chemical inputs, factory overhead, and selling,

general, and administrative expenses--and the surrogate values for

these factors in the petition to the values selected for the

preliminary determination, as discussed below. Our analysis showed

that, in general, the petitioner's data was reasonably close to the

data submitted by the respondents or to the surrogate values chosen by

the Department. (See memorandum to the file dated July 22, 1999

(``Corroboration Memo'').) Based on our analysis, we find that the

calculations set forth in the petition have probative value.

Company-Specific Rates--Partial Facts Available

Freemen claims that despite its repeated demands, one of its

suppliers has refused to provide factors of production data to Freemen.

According to Freemen, this supplier, who supplied a relatively small

percentage of creatine sold by Freemen, has indicated that it will not

participate in any way in this investigation. Freemen has provided all

factors of production data from its other suppliers. Similarly, Blue

Science asserts that one of its suppliers, which accounts for a small

percentage of creatine sold by Blue Science, only produced the subject

merchandise on a trial basis and has since terminated production. As

such, the supplier was not able to provide complete factors of

production data to Blue Science.

We preliminarily determine that the use of adverse facts available

is warranted where the factors of production are missing or unusable.

Because certain producers of the subject merchandise neither provided

complete and accurate factors of production information nor

demonstrated satisfactorily why this is not possible, we find that

these interested parties have not cooperated to the best of their

abilities. Accordingly, as adverse facts available, we have applied a

margin of 153.70 percent, the highest margin from the petition, to

those sales for which we did not have complete factors of production.

Fair Value Comparisons

To determine whether sales of the subject merchandise by Tiancheng,

Sanjian, Blue Science, Nantong, Freemen, and Desano to the United

States were made at LTFV, we compared the EP to the NV, as described in

the ``Export Price'' and ``Normal Value'' sections of this notice,

below. In accordance with section 777A(d)(1)(A)(i) of the Act, we

compared POI-wide weighted-average EPs to weighted-average NVs.

Export Price

We used EP methodology in accordance with section 772(a) of the

Act, because the subject merchandise was sold directly to unaffiliated

customers in the United States prior to importation and CEP methodology

was not otherwise appropriate. We calculated EP based on packed CIF or

C&F prices to the first unaffiliated purchaser in the United States.

Where appropriate, we made deductions from the starting price (gross

unit price) for billing adjustments, inland freight from the plant/

warehouse to port of exit, brokerage and handling in the PRC, marine

insurance and ocean freight. Because certain domestic brokerage and

handling, marine insurance, and inland freight were provided by NME

companies, we based those charges on surrogate rates from India. (See

``Normal Value'' section for further discussion.)

Normal Value

1. Surrogate Country

Section 773(c)(4) of the Act requires the Department to value the

NME producer's factors of production, to the extent possible, in one or

more market economy countries that: (1) are at a level of economic

development comparable to that of the NME, and (2) are significant

producers of comparable merchandise. The Department has determined that

India, Pakistan, Sri Lanka, Egypt, Indonesia, and the Philippines are

countries comparable to the PRC in terms of overall economic

development (see memorandum from Jeff May, Director, Office of Policy,

to Susan Kuhbach, Senior Director, AD/CVD Enforcement, Office 1, March

26, 1999). According to the available information on the record, we

have determined that both India and Indonesia are significant producers

of comparable merchandise. Although we have no information to indicate

that India and Indonesia produce creatine, they do produce other

products within the same customs heading and produce other fine

chemicals with nutritional characteristics. Of these two countries,

India produces and exports more merchandise than Indonesia under United

National Standard International Trade Classification Revised number

514.82, ``carboxyamide-function compounds (including saccharin and its

salts) and imine-function compounds,'' the heading which includes

creatine. Accordingly, we have calculated NV using mainly Indian

values, and in some cases Indonesian values, for the PRC producers'

factors of production. We have obtained and relied upon publicly

available information wherever possible.

2. Factors of Production

In accordance with section 773(c) of the Act, we calculated NV

based on factors of production reported by the companies in the PRC

which produced creatine for the exporters that sold creatine to the

United States during the POI. To calculate NV, the reported unit factor

quantities were multiplied by publicly available Indian and Indonesian

values.

In selecting the surrogate values, we considered the quality,

specificity, and contemporaneity of the data. As appropriate, we

adjusted input prices to make them delivered prices. Where a producer

did not report the distance between the material supplier and the

factory, as facts available, we used either the distance to the nearest

seaport (if an import value was used as the surrogate value for the

factor) or the farthest distance reported for a supplier. Where

distances were reported, we added to Indian CIF surrogate values a

surrogate freight cost using the shorter of the reported distances from

either the closest PRC port to the PRC factory, or from the domestic

supplier to the factory. This adjustment is in accordance with the

CAFC's decision in Sigma Corp. v. United States, 117 F. 3d 1401

(Fed.Cir. 1997). For those values not contemporaneous with the POI and

quoted in a foreign currency, we adjusted for inflation using wholesale

price indices published in the International Monetary Fund's

International Financial Statistics.

Many of the inputs in the production and packing of creatine are

considered business proprietary data by the respondents. Due to the

proprietary nature of this data, we are unable to discuss many of the

inputs in this preliminary determination notice. For a complete

analysis of surrogate values, see the memorandum from the Team to the

file (``Factors of Production Memorandum''), dated July 22, 1999.

We valued labor using the method described in 19 CFR 351.408(c)(3).

[[Page 41379]]

To value electricity, we used the 1995 electricity rates reported

in the publication Energy Prices and Taxes, 4th quarter

1998. We based the value of coal on prices reported in Energy Prices

and Taxes, 2nd quarter 1998.

We based our calculation of factory overhead, SG&A, and profit on

1992-93 data from the ``Expenditures and Appropriations'' section of

the accounts of ``Processing and Manufacturing, Chemicals and products

thereof'' from the Reserve Bank of India Bulletin, January 1997.

To value truck freight rates, we used a 1994 rate from The Times of

India. For inland water transportation, we valued boat and barge

transportation using the surrogate values found in an August 1993 cable

from the US Embassy Bombay. With regard to rail freight, we based our

calculation on information from the Indian Railway Conference

Association.

For packing materials we used import values from the Monthly

Foreign Trade Statistics of India; Volume II Imports.

Critical Circumstances

In the February 12, 1999 petition, the petitioner alleged that

there is a reasonable basis to believe or suspect that critical

circumstances exist with respect to imports of creatine from the PRC.

In addition, the petitioner requested that the Department issue its

preliminary critical circumstances finding on an expedited basis

because importers, exporters and producers had an early warning of the

proceeding prior to the filing of the petition. The basis for

petitioner's contention was that PRC parties had advance knowledge of

the petition through a press release dated January 25, 1999, from a

public relations firm's website. The press report stated that the

petitioner would be filing an antidumping petition with the Department

and the ITC in order to seek the imposition of substantial, triple

digit dumping duties on all importers of creatine from China.

We examined whether conditions in the industry and published

reports and statements provided a basis for inferring knowledge that a

proceeding was likely. We preliminarily determine that the January 25,

1999 press report cited by the petitioner is insufficient to show that

such information was widely available. Our research of Lexis-Nexis and

Internet inquiries revealed nothing to indicate that the press release

was reported by any publication. Moreover, the petitioner did not

provide the Department with further documentation to support its

allegation. Therefore, because there is insufficient evidence on the

record indicating the likelihood of a proceeding concerning imports of

creatine from the PRC, we have not made an expedited critical

circumstances determination.

On April 8, 1999, the Department requested information regarding

shipments of creatine for the period September 1998 to June 1999 from

all respondents participating in this investigation. On May 13, May 14,

May 20 and July 6, 1999, we received the requested information from

Tiancheng, Sanjian, Blue Science, Nantong, Freemen and Desano. The

information submitted by Desano was limited to shipment data for the

period August 1998 to December 1998. Despite our subsequent request for

shipment data for the remaining time period (i.e., January 1999 to June

1999), Desano did not provide any additional information. On May 25,

1999, the petitioner argued that, based on the information submitted,

critical circumstances existed with respect to imports by Freemen.

Section 733(e)(1) of the Act provides that the Department will

determine that critical circumstances exist if there is a reasonable

basis to believe or suspect that: (A)(i) there is a history of dumping

and material injury by reason of dumped imports in the United States or

elsewhere of the subject merchandise, or (ii) the person by whom, or

for whose account, the merchandise was imported knew or should have

known that the exporter was selling the subject merchandise at less

than its fair value and that there was likely to be material injury by

reason of such sales, and (B) there have been massive imports of the

subject merchandise over a relatively short period.

With respect to the first criterion, we are not aware of any

antidumping order in any country on creatine from the PRC. Therefore,

we examined whether there was importer knowledge. In determining

whether there is a reasonable basis to believe or suspect that an

importer knew or should have known that the exporter was selling

creatine at less than fair value and thereby causing material injury,

the Department must rely on the facts before it at the time the

determination is made. The Department normally considers margins of 25

percent or more and a preliminary ITC determination of material injury

sufficient to impute knowledge of dumping and the likelihood of

resultant material injury.

On April 7, 1999, the ITC preliminary determination found that

there was a reasonable indication that the U.S. industry is materially

injured. See, Creatine Monohydrate from the People's Republic of China,

64 FR 16998 (April 7, 1999). Therefore, with respect to the PRC, we

preliminarily determine that there is a reasonable basis to believe or

suspect that importers knew or should have known that material injury

from the dumped merchandise was likely.

In determining whether there are ``massive imports'' over a

``relatively short time period'', the Department ordinarily bases its

analysis on import data for at least the three months preceding (the

``base period'') and following (the ``comparison period'') the filing

of the petition. Imports normally will be considered massive when

imports during the comparison period have increased by 15 percent or

more compared to imports during the base period. The Department

examines respondent-specific shipment information or aggregate import

statistics when respondent-specific shipment information is not

available.

To determine whether imports of subject merchandise have been

massive over a relatively short period, we compared each respondent's

export volume for five months prior to the filing of the petition

(September 1998 to January 1999) to that during the five months

subsequent to the filing of the petition (February 1999 to June 1999).

These periods were selected based on the Department's practice of using

the longest period for which information is available from the month

that the petition was submitted through the date of the preliminary

determination. For all other exporters, we performed the analysis using

import statistics.

Based on our analysis, we preliminarily determine that the increase

in imports was greater than 15 percent for Freemen and for all

producers/exporters of subject merchandise who were not analyzed or who

failed to submit a response. As explained above, one respondent--

Desano--did not comply with our request for shipment data for the

period January 1999 to June 1999. Accordingly, we find that the

information Desano submitted is so incomplete that it cannot serve as a

reliable basis for reaching a determination regarding massive imports

in this investigation. Therefore, pursuant to section 782(e) of the

Act, we preliminarily determine that there were massive imports with

respect to Desano based on adverse facts available. With regard to the

other four respondents, Tiancheng, Nantong, San Jian, and Blue Science,

we find that the increase in imports was not greater than 15 percent.

See Memorandum from Team to Richard W. Moreland, Deputy Assistant

Secretary, AD/CVD Enforcement Group I (``Critical

[[Page 41380]]

Circumstances Determination''), dated July 22, 1999.

On this basis, we preliminarily determine that critical

circumstances exist for Freemen, Desano and all other PRC exporters

except Tiancheng, Nantong, San Jian, and Blue Science.

We will make a final determination concerning critical

circumstances when we make our final determination of this

investigation.

Verification

As provided in section 782(i) of the Act, we will verify all

information relied upon in making our final determination.

Suspension of Liquidation

In accordance with section 733(d) of the Act, we are directing the

Customs Service to suspend liquidation of all imports of subject

merchandise from the PRC entered, or withdrawn from warehouse, for

consumption on or after the date of publication of this notice in the

Federal Register. In addition, for Desano and Freemen, as well as for

companies subject to the PRC-wide rate, we are directing Customs to

suspend liquidation of any unliquidated entries of subject merchandise

entered, or withdrawn from warehouse, for consumption on or after the

date 90 days prior to the date of publication of this notice in the

Federal Register. We will instruct the Customs Service to require a

cash deposit or the posting of a bond equal to the weighted-average

amount by which the NV exceeds the EP, as indicated in the chart below.

These suspension of liquidation instructions will remain in effect

until further notice.

------------------------------------------------------------------------

Weighted-

Exporter/manufacturer average margin Critical

percentage circumstances

------------------------------------------------------------------------

Blue Science International Trading 121.36 No.

(Shanghai) Co., Ltd.

Nantong Medicines and Health 1.63 No.

Products Import and Export Co.,

Ltd.

Shanghai Desano International 58.82 Yes.

Trading Co., Ltd.

Shanghai Freemen International 139.15 Yes.

Trading Co., Ltd., and Shanghai

Greenmen International Trading

Co., Ltd.

Suzhou Sanjian Fine Chemical Co., 152.67 No.

Ltd.

Tianjin Tiancheng Pharmaceutical 3.54 No.

Co., Ltd.

PRC-wide Rate...................... 153.70 Yes.

------------------------------------------------------------------------

The PRC-wide rate applies to all entries of the subject merchandise

except for entries from exporters/factories that are identified

individually above.

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. If our final determination is affirmative,

the ITC will determine before the later of 120 days after the date of

this preliminary determination or 45 days after our final determination

whether these imports are materially injuring, or threaten material

injury to, the U.S. industry.

Public Comment

Case briefs or other written comments in six copies must be

submitted to the Assistant Secretary for Import Administration no later

than November 17, 1999, and rebuttal briefs no later than November 22,

1999. A list of authorities used and an executive summary of issues

should accompany any briefs submitted to the Department. Such summary

should be limited to five pages total, including footnotes. In

accordance with section 774 of the Act, we will hold a public hearing,

if requested, to afford interested parties an opportunity to comment on

arguments raised in case or rebuttal briefs. Tentatively, the hearing

will be held on November 29, 1999 at the U.S. Department of Commerce,

14th Street and Constitution Avenue, N.W., Washington, D.C. 20230.

Parties should confirm by telephone the time, date, and place of the

hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate

if one is requested, must submit a written request to the Assistant

Secretary for Import Administration, U.S. Department of Commerce, Room

1870, within 30 days of the publication of this notice. Requests should

contain: (1) The party's name, address, and telephone number; (2) the

number of participants; and (3) a list of the issues to be discussed.

Oral presentations will be limited to issues raised in the briefs. If

this investigation proceeds normally, we will make our final

determination not later then 135 days after the publication of this

notice in the Federal Register.

This determination is issued and published in accordance with

sections 733(d) and 777(i)(1) of the Act.

Dated: July 22, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-19609 Filed 7-29-99; 8:45 am]

BILLING CODE 3510-DS-P